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DETROIT-The Michigan Public Service Commission has issued a report indicating that Michigan's existing generation resources are adequate to meet the state's demand, but by 2009, growing demand will overshadow supply. According to the study, certain measures must be undertaken to ensure that Michigan's electric grid continues to generate enough power.
"With aging electric plants and increasing demand for electricity, Michigan needs to start planning now to ensure that the lights stay on well into the future," says MPSC chairman J. Peter Lark. "While problems are not imminent, more electric generation may be needed as soon as 2009."
The group began its study in October 2004. Surveyors were tasked with determining if Michigan's electric generating capacity would be adequate to meet the growing demand for electricity, especially given the likely retirement of some of the state's older generating units.
Released this week, the study finds that peak electric power demand is projected to increase 2.1% per year. As more supply is needed, the group says new base-load power plant construction may need to be undertaken, depending on Michigan's overall economic activity and the number of short-term enhancements made by 2011. The report also says that demand growth, coupled with the expected retirements of some of Michigan's existing base-load power plants, will necessitate the addition of one or two base-load plants by 2014.
The study goes on to says that by 2009, unless enhancements to existing supplies are undertaken, growing demand will cause existing electric generation and transmission capacity in the Lower Peninsula to be insufficient to maintain reliability standards.
The MPSC staff recommended competitive bidding for plant construction. The group also says a utility should be required to extend ownership in the new plant to other Michigan entities.
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